April 6, 2006, marks the so-called 'A-Day' for UK pension reforms as the most sweeping changes in years to pensions regulation were implemented.
The changes have met with a heated reception in many quarters, however. Some observers believe that the new rules – including the contentious introduction of the SIPP, into which consumers can invest assets and some property – will only benefit the rich.
Under the reforms, people will be able to draw a pension while working for the first time, and be members of both an occupational and personal scheme at the same time.
At a time when the government says it cannot afford to pay workers on low incomes who lost their pensions when their companies collapsed, it is prepared to pay millions of pounds in tax relief to the rich, Ros Altman, a former government pensions adviser, told the Guardian newspaper.
There are also fears that the equity market could suffer as the new rules permit consumers to withdraw lump sums in cash of up to 25% of the total value from their pensions. This capital would normally be invested by funds in the stock market.